Dynamic relationship between external debt and unemployment in Sub-Saharan Africa

Samuel Erasmus Alnaa and Juabin Matey
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Samuel Erasmus Alnaa: Bolgatanga Technical University, Ghana

Theoretical and Applied Economics, 2023, vol. XXX, issue 1(634), Spring, 137-152

Abstract: The struggle to reduce cyclical unemployment by Sub-Saharan African countries is as a result of their inability to integrate fiscal policies into macroeconomic goals and establish independent, well-resourced bodies to manage borrowed funds. We examine the dynamic relationship between external debt and unemployment in Sub-Saharan Africa using data from 25 countries. This study demonstrates a direct relationship between foreign debt and unemployment, which is attributed to the erroneous application of discretionary fiscal policy decisions and the inefficient use of borrowed funds. Evidence also suggests a nonlinear relationship between external debt and unemployment across the countries studied.

Keywords: external debt; investments; unemployment; job opportunity; fiscal policy discipline. (search for similar items in EconPapers)
Date: 2023
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